. Daily FX Analysis - GBP/USD Soars, AUD Rallies, USD Faces Challenges.

Daily FX Analysis – GBP/USD Soars, AUD Rallies, USD Faces Challenges.

Daily FX Analysis – GBP/USD Soars, AUD Rallies, USD Faces Challenges.

21 Nov 2023

Introduction:

In currency markets, GBP/USD is approaching 11-week highs, driven by Governor Andrew Bailey’s recent speech. Meanwhile, AUD/USD seeks key levels post-RBA minutes, and USD/CAD faces pressure amid rising crude prices. USD/JPY hits a new low since October, with potential vulnerability at 148.00. Traders await crucial US economic indicators, impacting USD and the currency pairs.

GBP/USD:

GBP/USD trades near 1.2530 as it continues to rise towards 11-week highs.

The GBP/USD pair is on an upward trend for the third consecutive session, supported by the recent speech delivered by Bank of England (BoE) Governor Andrew Bailey at the Henry Plumb Memorial Lecture on Monday. As of the Asian session on Tuesday, the pair is hovering around 1.2530, approaching its highest levels in 11 weeks.

After undergoing a downward correction in the latter part of the preceding week, GBP/USD initiated the current week on a bullish note, reaching towards 1.2500 before facing a loss of momentum.

Despite the considerable selling pressure exerted on the US Dollar (USD) in the past week, the soft inflation figures from the UK posed challenges for GBP/USD to further prolong its upward trend.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2500 | Positive Crossover | Bullish
  • MA 20: 1.2423 | Positive Crossover | Bullish
  • MA 50: 1.2338 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.2500 | Positive Crossover | Bullish
  • MA 20: 1.2414 | Positive Crossover | Bullish
  • MA 50: 1.2306| Positive Crossover | Bullish

RSI (Relative Strength Index): 70.24| Buy Zone | Bullish

Stochastic Oscillator: 57.95| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 1.2537| R2: 1.2702
  • S1: 1.2398| S2: 1.2269

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.2583 | Take Profit: 1.2701 | Stop Loss: 1.2503

AUD/USD:

Australian Dollar seeks to reach a psychological threshold following the RBA minutes.

The Australian Dollar is making advances following Governor Bullock’s statement highlighting inflation as a challenge. The country’s central bank expresses optimism that the positive momentum in employment can be maintained.

For the third consecutive session, the Australian Dollar (AUD) continues to strengthen on Tuesday. This upward movement is driven by the hawkish remarks delivered by Reserve Bank of Australia (RBA) Governor Michele Bullock.

Additionally, the AUD/USD pair is receiving support from the RBA’s November meeting minutes, which conveyed a hawkish tone. The ascent in commodity prices further contributes to this support, reflecting investor confidence in the prospect of additional stimulus measures in China.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6553| Positive Crossover | Bullish
  • MA 20: 0.6497| Positive Crossover | Bullish
  • MA 50: 0.6448 | Positive Crossover | Bullish

Simple:

  • MA 5: 0.6557 | Positive Crossover | Bullish
  • MA 20: 0.6482 | Positive Crossover | Bullish
  • MA 50: 0.6438 | Positive Crossover | Bullish

RSI (Relative Strength Index): 72.06| Buy Zone | Bullish

Stochastic Oscillator: 67.87| Buy zone | Positive

Resistance And Support Levels:

  • R1: 0.6577| R2: 0.6698
  • S1: 0.6495| S2: 0.6394

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6614| Take Profit: 0.6698 | Stop Loss: 0.6560

USD/CAD:

With eyes on CPI Canada, the USD/CAD trades down near 1.3710 due to rising crude prices.

USD/CAD encounters difficulties amid enhanced crude oil prices. WTI experiences an uptick fuelled by speculation surrounding potential production cuts by OPEC. The Consumer Price Index (CPI) for Canada is expected to have moderated to 3.2% in October.

USD/CAD reverses its recent advances and is trading lower at approximately 1.3710 in the Asian session on Tuesday. The Canadian Dollar (CAD) gains strength against the US Dollar, buoyed by elevated crude oil prices.

Traders will keep a close eye on significant US economic indicators, such as Existing Home Sales and the Chicago Fed National Activity Index, scheduled for Tuesday.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.3722 | Positive Crossover | Bullish
  • MA 20: 1.3732| Negative Crossover | Bearish
  • MA 50: 1.3742 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.3718 | Positive Crossover | Bullish
  • MA 20: 1.3735 | Negative Crossover | Bearish
  • MA 50: 1.3765| Negative Crossover | Bearish

RSI (Relative Strength Index): 46.98| Buying Zone| Bullish

Stochastic Oscillator: 73.01 |Buying Zone | Positive

Resistance And Support Levels:

  • R1: 1.3728| R2: 1.3830
  • S1: 1.3654 | S2: 1.3574

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.3748 | Take Profit: 1.3830 | Stop Loss: 1.3699

USD/JPY:

USD/JPY falls to its lowest point since October, and the 148.00 mark appears vulnerable.

For the fourth consecutive day, USD/JPY experiences a decline, reaching a new low not seen since early October. The persisting dovish expectations regarding the Federal Reserve contribute to a decrease in US bond yields, weakening the US Dollar.

The USD/JPY pair continues to face selling pressure for the fourth consecutive day on Tuesday, also marking the fifth day of a downward trend in the past six days. It descends to its lowest level since October 4 during the Asian session.

Therefore, the minutes will be closely examined to gain new perspectives on the trajectory of interest rates and the opinions of policymakers regarding the possibility of another interest rate hike by the US central bank this year. Consequently, this is expected to offer significant momentum to the USD and the USD/JPY pair.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 148.27 | Negative Crossover | Bearish
  • MA 20: 149.70| Negative Crossover | Bearish
  • MA 50: 150.10| Negative Crossover | Bearish

Simple:

  • MA 5: 148.26 | Negative Crossover | Bearish
  • MA 20: 150.23| Negative Crossover | Bearish
  • MA 50: 150.39| Negative Crossover | Bearish

RSI (Relative Strength Index): 22.54| Selling Zone | Bearish

Stochastic Oscillator: 0| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 149.15 | R2: 151.73
  • S1: 147.53 | S2: 145.05

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 146.52| Take Profit: 145.05 | Stop Loss: 147.73.

Elsewhere in the Forex Market

NZD/USD up 0.34% to 0.6056. The EUR/USD up 0.12% to 1.0952. The EUR/GBP down 0.03% at 0.8745. USD/CHF down 0.14% at 0.8836, EUR/JPY down 0.22% at 161.86, The USD/CNY down 0.38% at 7.1408, AUD/SEK down 0.05% at 6.8470, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) BoE Gov Bailey Speaks at 00:15.

(AUD) RBA Meeting Minutes at 06:00.

(CAD) Core CPI (MoM) (Oct) Previous –0.1% at 19:00.

(USD) Existing Home Sales (Oct) Forecast 3.90M, Previous 3.96M at 20:30.

(EUR) ECB President Lagarde Speaks at 21:30.